Much has been made in the news lately about the current situation with student lending. Some members of the U.S. Congress are insisting that there
is a crisis unfolding as the number of lenders available to offer private student lending dwindles. Although there is some reason for concern, most students will not have a problem securing loans whether they are federal Stafford loans or private student loans through a lending institution.
One group of students has always had a difficult time securing funding and that group consists of students with bad credit or no credit history at all. The current “crisis” as some are calling it is due to lenders tightening up their lending requirements, standards that they relaxed when the economy was strong.
Loose lending practices get everyone into trouble: the student who is unable to pay back his debt and the lender who has to write off bad loans.
Although there isn’t a “magic bullet” for solving any of life’s challenges, students who desire to go to college and are in need of funding still have options available to them. Namely, if your credit isn’t good or you have no credit at all, seeking a co-signer for your private student loan is something you may want to pursue.
Granted, you need to depend on the generousity of your parents, a close relative, or a trusted friend, but if they know you and believe that you will repay your debt, then a willing co-signer can spell all the difference for you.
When applying for a private student loan, please note that your credit reports will be obtained by the lender as will your co-signer’s reports. Your credit history and credit score will be considered, but your co-signer’s good credit could tip the balance in your favor. You quite possibly could be approved for a loan, but you may be able to secure a lower interest rate, saving you thousands of dollars on your loans.
Further Reading
House Panel OKs Higher Limits For Student Loans
Lenders Drop Out Of Student Loan Market
Resources
How Best To Qualify For Private Student Loans
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